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Airtel Africa plans $100m share buyback as profit dips 100%

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Airtel Africa has revealed plans for a $100m share buyback programme starting March 2024.

This is as the company also reported a 99.6 per cent decline in its post-tax profit to $2m at the end of the nine months ended December 2023 from $523m at the end of the same period in 2022.

Providing insights into the loss, the firm said, “Profit after tax was $2m in the period, primarily impacted by significant foreign exchange headwinds, particularly the $330m exceptional loss after tax following the devaluation of the Nigerian naira in June 2023 and the Malawian
kwacha in November 2023 after the structural changes in their respective FX markets. The Nigerian naira devalued further in Q3’24, resulting in a $140m derivative and foreign exchange losses net of tax, which is not treated as an exceptional item.”
In its nine-month results for the period ended December 31, 2023, filed with the Nigerian Exchange Limited on Thursday, the firm declared a 1.4 per cent moderation in its revenue to $3.86bn from $3.91bn in December 2022.

However, Net cash generated from operating activities appreciated by 3.2 per cent to $1.76bn.

Speaking on the financial report, the outgoing Group Chief Executive Officer, Olusegun Ogunsanya, said, “We remain focused on the execution of our growth strategy and, combined with our strong operational execution, this has ensured that we continue to see sustained, positive growth momentum across the business, despite the inflationary and currency headwinds.

“Demand remains resilient, highlighting the vital nature of the voice, data and mobile money services we provide to our customers across the region, and has resulted in a strong 20.2 per cent constant currency revenue growth over the period, with an increase in EBITDA margins. This strong operating performance has limited the impact that currency movements have had on the Group. In this regard, whilst further currency devaluation, particularly in Nigeria, has weighed on our reported financial performance, it will not affect the execution of our growth plans.”

On a positive note, Ogunsanya said that the firm due to its sustained focus on capital allocation priorities will be able to fully repay HoldCo debt due in May 2024, “ensuring the continued success of our balance sheet de-risking strategy. This will allow us to continue investing in our strategic priorities to provide affordable and reliable services to customers across our markets, whilst also enabling us to capitalise on new business opportunities, such as our new data centre business, Nxtra by Airtel, which we launched in December.”

Focusing on the planned share buyback, the CEO said, “In light of our consistent strong operating performance and given current leverage, the Board intends to launch a share buy-back programme of up to $100m, starting early March 2024 over 12 months.

“We continue to be well positioned to deliver on the attractive growth opportunities our markets offer and despite the challenge of rising diesel prices, ongoing currency devaluation and inflationary pressures across some of our markets, we remain focused on margin resilience.”

In its half-year results for the period ended September 30, Airtel Africa recorded a loss after tax of $13m driven largely by a foreign exchange loss of $471m in finance cost.

In its Q1, 2023 report, the telecom company suffered a loss after tax of $151m, driven largely by a foreign exchange loss because of the devaluation of the Nigerian naira in June 2023.

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